Euro, oil and European shares head for small November gains

After a month of market obsessing about US presidential elections and the potential for an economic-growth shattering ‘fiscal cliff’ in the US, European markets are heading for small gains in November.

While US budgetary negotiations have dominated the financial newsflow, markets have also been dictated by efforts to release Greece’s next trance of aid, concerns over conflict in the Middle East and China’s leadership change.

On Friday, ahead of the traditionally quieter month of December, markets were little moved. The FTSE 100 and Eurofirst 300 were both flat, at 5876 and 1122 respectively. Over a V-shaped month for UK stocks – dipping in the middle of November – the UK’s blue chip index is up some 1.5%, with the mid-cap league 1% higher.

The euro moved higher on Friday morning, notching up a 0.3% gain to $1.302, continuing to build on its small gains for the month. The single currency – nowadays a gauge of risk appetite – moved higher against the Japanese yen this morning after the Japanese government approved a stimulus package and data showed an unexpected increase in industrial production.

In India, economists were calling for stimulus measures after the news that the country’s growth rate slowed to 5.3%.

The news from Japan overnight was enough to boost Asian shares, which also benefited from small gains in the US on Thursday. The 0.28% advance on the Dow Jones industrial average – which has fallen nearly 0.6% over the past month – came even as House Speaker John Boehner dashed hopes that lawmakers were getting closer to a budget deal.

The oil price, which has been steadily rising throughout November amid fears over the outcome of violence in Gaza is 0.3% lower today at $110 per barrel, but is nearly where it started 2012, as measured by Brent crude oil futures.

Since the start of 2012, major equity markets are also higher. London’s FTSE 100 is up 5.3%, with the FTSE 250 up 19.3%; the US Dow has gained 6.5%.

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